Transmountain expansion will cost taxpayers $1.9 billion more and will be delayed if it gets built at all

[Anonymous]

OTTAWA — Kinder Morgan Canada says expanding the Trans Mountain pipeline could cost the federal government as much as $1.9 billion beyond the company's original construction estimate and take 12 months longer to finish.



The figures are included in documents the company filed Tuesday with the U.S. Security and Exchange Commission related to its plan to sell the pipeline to the Canadian government for $4.5 billion.



Contractor negotiations



The sale price does not include how much more Canadians will pay to finish twinning the pipeline between Alberta and B.C. Finance Minister Bill Morneau won't say how much Ottawa expects to spend on construction because he fears that would affect negotiations with construction contractors.



The $7.4-billion construction cost Kinder Morgan reported in February 2017 hasn't been updated since the project hit construction delays and opposition in B.C.



The first update of any kind came Tuesday when Kinder Morgan filed required documents as the company gears up for a shareholder vote on the sale in Calgary on Aug. 30.



In those pages, the company looks at different construction cost scenarios as part of a fairness evaluation of the sale offer to the Canadian government.



The most expensive scenario pegs construction costs at $9.3 billion, taking until December 2021 to complete — a full year after the current timetable.



The government was quick to point out the figure is not an official cost forecast. An official in Morneau's department said the numbers do not specifically reflect the government's expectation of what the final project cost will be.



However Robyn Allan, an independent economist and former CEO of the Insurance Corporation of British Columbia, said Kinder Morgan wouldn't evaluate the fairness of the sale based on numbers that have no bearing on reality.



Final price tag



Allan believes in the end $9.3 billion will seem like a steal compared to the final price tag.



"This is the least it's going to cost," said Allan.



Morneau's office said as soon as construction contracts are in place the government will freely release an official cost update, which he said should happen no later than next winter.

[Anonymous]

But in one way, the delay and increased costs are good: The company has to tell the truth about all the pipeline's problems and costs.



If the Trudeau government already owned Trans Mountain, do you really imagine Canadians would know about the higher price tag and the longer completion date?



Once the company turns over the pipeline to Ottawa, there will be no more SEC reporting requirements.



Then the only way to find out what's going on will be through access to information requests.



Those take forever and often end up producing documents in which all the juicy info is blacked out.

Ever since the Liberal government bought Trans Mountain in late May its ministers have been dodgier and dodgier about when it would be built, how much it would cost and how many jobs it would create. Now we know why. There is even a chance the Trudeau Liberals have no intention of building the Trans Mountain Expansion, ever.



They paid Kinder Morgan about 25% over market value for its Canadian operations so they could claim they were taking action to get the line built.



But they have no intention of jeopardizing the re-election chances of their 18 B.C. MPS by putting actual pipe in the ground or arresting protesters or applying for construction permits.



And they have never made a clear statement or passed a motion exercising their constitutional authority to proceed with the pipeline.



Once next year's campaign is over, they could simply claim the project has become too expensive and walk away.

[Anonymous]

Canada spends billions of dollars buying Saudi Arabian oil.



For years, it has been an oft-repeated Alberta grievance that these imports exist at all. Despite sitting atop an ocean of proven oil reserves, Canada continues to spend a small fortune every year buying oil from a country that executes homosexuals, flogs dissidents and has a nasty habit of funding Islamic extremism.



Between 2007 and 2017, Statistics Canada figures show that Canada imported a total of $20.9 billion of Saudi Arabian petroleum oils. For context, this is almost precisely what Canada spends on its military per year. It's also way more than the expected $15.7 billion cost of the Energy East pipeline. On average, in recent years, Saudi Arabia supplies about 10 per cent of Canada's oil imports. What's more, Saudi Arabia is climbing the leader board of countries that Canada's relies upon for its foreign oil. As recently as 2010, Saudi Arabia ranked as Canada's fifth largest supplier of foreign oil (behind Algeria, Norway, the U.K. and Kazakhstan). Now, Saudi Arabia is second only to the United States.



All of the Saudi oil imported into Canada in 2017 and 2018 came through New Brunswick, which only has one oil import facility: The massive Irving Oil-owned Saint John refinery. Between January and June of this year that refinery has imported $1.8 billion of Saudi oil — roughly $10 million per day. The amount of U.S. oil entering the refinery, for comparison, is equivalent only to about $3.8 million per day. Unlike most Canadian refineries, Saint John has no access to a pipeline; every barrel of oil it processes either comes by tanker or train. (The oil train that caused the Lac-Mégantic rail disaster, in fact, was headed to the Saint John refinery).

[Anonymous]

SAUDI SPAT PROOF OF NEED FOR PIPELINES



Trudeau government's spat shows why failed Energy East project mattered



By Sun News Media



On Thursday, Saudi Energy Minister Khalid al-falih said the current diplomatic spat between the Kingdom of Saudi Arabia (KSA) and Ottawa would not affect Saudi oil sales to Canada. Of course not. That's money we pay them. Everything action they've take so far affects only money they send us.



The Saudis aren't stupid. We get about 15 per cent of our foreign oil from them; between $4 billion and $5 billion a year.



They have recalled the 7,000 university students they have in Canada, as well as those students' 5,000 dependents. Since the kingdom pays full foreign-student tuition on their behalves, the loss for Canadian universities is in the neighbourhood of $350 million to $450 million a year. The Saudis have expelled our ambassador, cancelled commercial flights from Riyadh to Toronto, ended purchases of Canadian wheat and called into doubt $15 billion in arms sales from Canadian manufacturers to the Saudi military.



But most of that costs us, not them. They're not going to forego a big chunk of change just to drive home a point. Now[size=150] imagine if we had the capacity to cut off their oil sales to us. [/size]That might give Canada the upper hand.



[size=150]We have more than enough oil of our own to replace every drop we buy from the Saudis.[/size] Indeed, our reserves are third-largest in the world behind only theirs and the Venezuelans.'



Why in heaven's name is Canada buying foreign oil in the first place?



[size=150]You can blame the Trudeau government for the fact that we can't cut off the Saudis[/size], so the kingdom has the advantage over us as a result. Not only did the Trudeau government start this fight with Saudi Arabia by sending out some pompous Tweets last week demanding the Saudis immediately release a prominent women's rights activist, along with other political protesters. (It's not the subject of these Tweets that's the problem, it's the fact the Trudeauites chose to conduct "diplomacy by Tweet" rather than just through formal channels — not unlike Donald Trump.)



[size=150]The Trudeau government is also to blame for putting us in a weakened bargaining position by killing the Energy East pipeline last year.

[/size]

Energy East would have carried hundreds of thousands of barrels of Alberta oil a day to eastern refineries, mostly in New Brunswick.



With that much capacity, we could cancel sales from any of our foreign supplier in case of a trade dispute — even the U.S. (53 per cent) — and not notice any disruption or inconvenience among consumers.



Energy East would have put Canada in a strong position in any trade war.



But last summer, the Trudeau government moved the regulatory goalposts for approving Energy East. Instead of making the line's owners, Transcanada, responsible for the environmental costs of constructing and operating the line, the Liberals decided to add the environmental costs of extracting the oil that would travel down the line AND for the cost of refining and consuming the oil after it had exited Energy East.



That change made the costs prohibitive, so Transcanada backed out last fall.



Even if Energy East had been approved, it wouldn't yet be ready. The pipeline would be of no immediate benefit in the battle Ottawa has picked with the KSA.



But it would be a psychological boost to our position to point out that in a couple of years, we wouldn't need Saudi oil. Or American oil. Or Norwegian, Nigerian, UK or Azerbaijani.



It's hard to imagine any other country with the ability to have energy self-sufficiency or security not taking advantage of that chance. But Canada, especially under the Trudeau Libs, has done everything to keep itself dependent on foreign oil and foreign governments.

[JOE]

Not sure where I stand on the TPP.



There are solid arguments for and against.



I think the reall underlying issue is who benefits financially from the pipeline and who doesn't.



For example, A place like Norway has plenty of oil exploration going on but nobody seems to be complaining.



I think a major reason is they distribute the benefits to its citizens better.



Norway has a 1% poverty rate, a better medical and social welfare system than Canada.



While Canada has socked away around $20 billion in a heritage fund, Norway has saved more than a trillion despite having much less oil than Canada.



So in a way I can see that if the oil companies & their execs reap all the profits and benefits, why many resist the pipeline.

[Anonymous]

That's an apples to oranges comparison..



Norway gets more than double per barrel for their crude than what Western Canada gets..



On top of that, they don't have to send billions of dollars every year in royalties to Eastern Canada..



Alberta had the richest middle class in the world, even wealthier than Norway..



I look at Venezuela that unlike Canada has full access to the American market without any discount like Alberta and Saskatchewan are subjected to and they are falling apart..



Alberta and Saskatchewan have our resources in handcuffs and we still support the nation..



I never used to get involved with these issues, but our country's middle class is at stake..



No pipelines to international markets means other countries will buy from the USA which will soon be a major exporter of oil and LNG..



That revenue and those middle class jobs will be gone forever..



How could anyone be opposed to that?

[Anonymous]

^Joe knows it's a ridiculous comparison. I think it was mentioned here that Canadian companies worked on Norway, as well as other countries pipeline networks.  



So, an appeals court says First Nations weren't consulted. Except many First Nations bands along the pipeline route say they were and endorsed the project. The appeals court says the marine review didn't take into account the decreasing number of killer whales in the North Pacific. The dearth of pipelines  to international markets costs the Canadian economy up to $100 million per day. Thirty seven million people are making huge sacrifices for possibly upsetting a few thousand killer whales.



This whole situation could have been avoided in the first place if we had real leadership in Ottawa. They have the jurisdiction, authority and duty to pass legislation that would have seen this nearly built by now. Under Trudeau's watch, LNG Petronas, Northern Gateway, Energy East and now Transmountain have been killed. Eighty billion dollars and 110,000 jobs gone. We need leadership in Ottawa soon or we will become a large version of Greece.

[Chuck Bronson]

Three billion dollars is nothing.  Our native Indians cost us billions every year anyhow.



Welcome to your new world, Chinks!  It's good that you're here now to take over our burden.  Now it's your turn to pay for these bums!

[Anonymous]

Three billion dollars is nothing.  Our native Indians cost us billions every year anyhow.



Welcome to your new world, Chinks!  It's good that you're here now to take over our burden.  Now it's your turn to pay for these bums!

What three billion dollars are you talking about?



Ottawa paid $4.5 billion for a pipeline they knew would never be built and never wanted to be built..



If it had actually been built it would have cost $1.9 billion more than what was projected..



But, since it will never be built Ottawa can claim they saved us $1.9 billion.

 :001_rolleyes:

[Chuck Bronson]

Yeah, you're right.  You're always right.

[Chuck Bronson]

You and Seoul are always right, Fash.  I know this.

[Frood]

Trans mountain pipeline expansion sounds like it could easily be describing Justin Trudeau's gender reassignment surgery.

[Wazzzup]

Trans mountain pipeline expansion sounds like it could easily be describing Justin Trudeau's gender reassignment surgery.

 :MG_216:



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[cc]

.....If it had actually been built it would have cost $1.9 billion more than what was projected..



But, since it will never be built Ottawa can claim they saved us $1.9 billion.

 :001_rolleyes:

Yeah, you're right.  You're always right.

Well at least we got that straightened out and settled

[Anonymous]

This appeared in Sun News.



Justine has effectively stopped any new resource infrastructure from ever being built in Canada with Bill C-69.





Effectively what the Federal Court of Appeal did on Thursday was kill Trans Mountain and all future pipelines.



Oh, it could say it hasn't raised an impossible bar to pipeline construction. And it might argue it hasn't handed the most militant First Nations and environmentalists a veto over future projects. But that is effectively what the justices did.



The only real hope is that the federal government (which is now the proud owner of the non-pipeline after Kinder Morgan shareholders voted over 99 per cent in favour of getting out of town as fast as they could) will appeal this decision to the Supreme Court. And the Supreme Court will somehow decide next year or in 2020 (or 2021), that the Federal Court was wrong.



But until then (and I don't hold out much hope of the Supremes injecting sanity into the issue), Trans Mountain is in limbo — and along with it, Alberta's economy.





On Thursday morning, the first oil and gas story was "Construction officially underway on Trans Mountain Pipeline Expansion." Contractor Midwest Pipelines had begun clearing brush and rocks from the Trans Mountain right-of-way between Edmonton and Jasper.



So? I suppose at some point in the future the right-of-way might make a nice hiking and biking trail to the Rockies.



Of course Kinder Morgan (KM) shareholders overwhelmingly approved the sale of Trans Mountain and KM's other Canadian operations to the federal government. Why wouldn't they take Justin Trudeau's offer of $4.5 billion for assets that are worth, at most, $3.5 billion?



Grab that money and run, especially because the Federal Court of Appeal — the same court that killed the Northern Gateway pipeline in 2016 — quashed the National Energy Board's construction permits for Trans Mountain. The justices ruled that the regulator had failed to consult adequately with First Nations.



That's a ridiculous claim.



In 2016, the NEB spent nine months focused primarily on First Nations' concerns/demands over Trans Mountain. It heard from scores of Indigenous governments and individuals, and incorporated most of their concerns in the final conditions it placed on Kinder Morgan.



But the court, as it had when it ended Northern Gateway, said that holding hearings and accepting submissions from February to November, 2016 wasn't good enough. Basically, the court decided that because the NEB hadn't accepted every First Nations concern, it hadn't listened enough. That's an old fallacy: If you don't agree with me, you obviously haven't heard me.



Practically, what the court has done is create an Indigenous veto on all future energy projects — a veto that extends to the rich (and often foreign) environmental groups that back a lot of the anti-pipeline First Nations.



There is no way any company or government can meet all the demands of all the groups or people along a pipeline's route or near an oilsands development. But the Federal Court of Appeal has now said, in effect, if you can't please everyone, you can't go ahead.



It's a little more complicated than that — but only a little.



The Federal appeals court said the NEB's "consultation framework" was "reasonable and adequate" if "properly executed" It's just that the NEB failed to follow its own consultation guidelines, the justices ruled.



In theory, I guess, that offers a ray of hope. The NEB could choose to go back and redo its First Nations' consultations. And, maybe, there is some way that would please the judges.



However, the only way the court would seem to be satisfiable is if the NEB rejects every project. If the NEB doesn't give in to every opponent, then the court seems think the NEB hasn't done its job properly.



It will be interesting to see whether the Liberals — Trans Mountain's new owners — will launch a vigorous appeal to the Supreme Court.